Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Tuesday 19 June 2012

NAHB points to more housing starts and will help US growth in 2013

The NAHB index for the confidence of homebuilders rose again in the US. This is a leading indicator for housing starts .The abysmal fall of housing starts was a very important reason why the economic recovery since 2009 was so poor. Now it signals help for the economy in 2013. This is necessary to limit the damage of the fiscal cliff (the end of the Bush tax cuts that will cause 4% austerity unless enough repair works will be in place;


my opinion: the fiscal cliff will be diluted to 2% and the multiplier effect will be c. 0.5, so it will diminish growth with 1% next year; this is not enough to cause a recession, especially not with the help of more housing starts).

The news about the US housing market remains quite good after several disaster years. More and more statistics show rising house prices, inventories versus sales are declining and foreclosures will decline.

This is not yet a good or normal housing market. There are still huge numbers of foreclosures, too many millions of Americans that are under water with their mortgages. It is still not easy to get a mortgage, but the situation is improving. With government subsidies (also favourable for banks) this can improve further.

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